NEW YORK (CNN/Money) -
Dow Chemical Co. warned Wednesday that it will see flat earnings in the third quarter rather than the expected improvement in the bottom line.

Dow Chemical (DOW: down $2.41 to $27.39, Research, Estimates) said it expects to earn about the same 16 cents a share from operations that it earned in the comparable period a year earlier. Analysts surveyed by earnings tracker First Call had a consensus earnings-per-share forecast of 29 cents and a range of estimates from 24 cents to 33 cents.

The nation's largest chemical company blamed higher costs for oil and gas feedstocks, mainly in Europe, as the principal reason for the warning.

Analyst Graham Copely of Sanford Bernstein told Reuters that Dow Chemical has been fighting rising energy prices that make for a difficult backdrop of maintaining costs.

"This is not a Dow specific problem...it's an industry problem," said Copely. "Dow just pre-announced first. Dow has been cutting prices drastically. But you are getting an indication of how competitive this industry is and how lackluster the economy is."

"My fear is that we see a very, very dramatic change in Q4 expectations from here on," Copely noted.

Copely said his fourth-quarter earnings estimate for Dow Chemical is 27 cents a share, compared with a general consensus of 34 cents.

"Both of those numbers are probably too high," he added.

Dow Chemical's warning comes as a turnaround from the stance it held in July when it reported lower second-quarter earnings from the previous year but forecast substantially better earnings for the third-quarter.